The China-Davos challenge

Source: The Edge Singapore

Update: Jul 10th, 2026

The Sum­mer Davos, held in Dalian, passed almost without notice in much of the West­ern media. The meet­ing was sig­ni­fic­ant for what it said about the devel­op­ment of the digital and tech­no­lo­gical eco­nomy in China.

The out­line bones of these aspir­a­tions are found in the 15th FiveYear Plan but Premier Li Qiang put some flesh on the bones. He also demol­ished the idea that China’s com­pet­it­ive­ness depended on sub­sidies. These changes are designed to har­ness what Pres­id­ent Xi Jin­ping calls the “new qual­ity pro­duct­ive forces”.

This is more than a fancy slo­gan. Five years ago, many observ­ers dis­missed the catchy slo­gan, “Designed in China”, which cap­tured the aspir­a­tions of the 15th Five-Year Plan. That dis­missal was a mis­take.

Busi­nesses need to ensure that they do not make the same mis­take this time. These new pro­duct­ive forces are chan­ging the eco­nomic and con­sumer land­scape. Those that catch the emer­ging oppor­tun­it­ies early can reap great bene­fits.

This growth does not rely on sub­sidies. It is driven by an innov­a­tion eco­sys­tem that is every bit as com­pet­it­ive as that found in Sil­icon Val­ley.

China is no longer just a sales mar­ket. It is a place where products are tested faster, where clustered sup­ply chains respond more rap­idly, where founders move faster because the com­pet­i­tion is more numer­ous and where entire indus­tries evolve at break­neck speed.

Amer­ica claims to move fast and break things. China aims to move fast and build things, and that’s a very dif­fer­ent philo­soph­ical approach.

The focus on these policy ini­ti­at­ives goes bey­ond advanced indus­tries like clean-energy man­u­fac­tur­ing, semi­con­duct­ors and bio­tech­no­logy. An intel­li­gent digital and tech­no­lo­gical soci­ety feeds into every level of eco­nomic activ­ity, chan­ging the nature of work in ways not yet fully under­stood. Explor­ing these exper­i­ences was the agenda of the Sum­mer Davos.

China is becom­ing the “Smart Fact­ory of the Future” with a full-scale indus­trial trans­form­a­tion. Fixed asset invest­ment in man­u­fac­tur­ing has a strong focus on digital trans­form­a­tion, AI integ­ra­tion and green tech­no­lo­gies.

Under the Man­u­fac­tur­ing Upgrade Plan 2026, over 70% of large man­u­fac­tur­ers will oper­ate smart, digit­ally net­worked factor­ies.

China leads in the devel­op­ment of elec­tric vehicles, high-speed rail, solar, 5G, quantum com­put­ing and auto­ma­tion. These unleash the applic­a­tion of new pro­duct­ive forces that change the eco­nomic and social land­scape in the same way that the wide­spread applic­a­tion of elec­tri­city did in the late 19th cen­tury.

How China responds to these chal­lenges will ripple well bey­ond its bor­ders and shape sup­ply chains, busi­ness strategy and cooper­a­tion between the world’s biggest eco­nom­ies. This shapes the way busi­ness will engage with China and the oppor­tun­it­ies which will emerge in this new land­scape. Exist­ing busi­ness struc­tures may dis­ap­pear, just as can­dle­stick-makers were extin­guished by elec­tric light­ing.

Tech­nical out­look for the Shang­hai mar­ket

The Shang­hai index retreated from the 4,100 res­ist­ance level. The sud­den fall last week found sup­port at the lower edge of the trad­ing band near 4,025. This week, the index has dropped below the 4,025 sup­port level.

The mar­ket is defined by a broad trad­ing band shown as res­ist­ance at line C and sup­port at line B. The index has pre­vi­ously moved below line B but this was char­ac­ter­ised by a series of “up” days. Although the mar­ket fell, each day cre­ated a white bullish candle. This sug­ges­ted the over­shoot below sup­port at 4,025 was tem­por­ary.

This week is dif­fer­ent. The move below 4,025 is filled with black bear­ish candles. This sug­gests the retreat is more ser­i­ous and has a higher poten­tial to fall to 3,900 sup­port.

A fall to this level would be a con­tinu­ation of the down­trend pres­sure that star­ted from the high near 3,250.

The index is poten­tially devel­op­ing a fan pat­tern. This is shown with the two down­trend lines 1 and 2. The fan pat­tern is a long-term trend reversal pat­tern. It is too early to con­firm this is a fan pat­tern, so traders will keep track of its devel­op­ment. This is not a Fibon­acci fan. There is cur­rently no strong trend­ing activ­ity, so this mar­ket is traded as a short-term rally and retreat envir­on­ment.

The Guppy Mul­tiple Mov­ing Aver­age (GMMA) indic­ator shows the long-term group of aver­ages are com­pressed and mov­ing down­wards. This shows investors are begin­ning to lose con­fid­ence in uptrend con­tinu­ation.

The move­ment of the short-term GMMA is used to track the beha­viour of traders. This has turned down and expan­ded, show­ing strong selling pres­sure.

Traders will trade the ral­lies. Investors will wait for a clear trend dir­ec­tion to be estab­lished.